SHERPA Framework
Process To Maximize Value and Transition On Your Terms
Strategy
Define personal and financial goals for exiting the business
health check
Understand current state of business opportunities and readiness risks
enhance value
Make the business more attractive to potential buyers
readiness
Prepare for business transition and align efforts
planning
Work with advisors and professionals to develop a detailed exit plan
action + Accountability
Stay accountable to the strategic transition process to achieve your vision
The S-H-E-R-P-A framework helps business owners navigate the complex process of transitioning or exiting their business by focusing on strategy, health assessment, value enhancement, readiness, planning, and action.
This structured approach ensures that all critical aspects are addressed, leading to a successful and smooth transition on your terms and timeline.
S – Strategy
Develop Clear Exit Strategy: Define personal and financial goals for exiting the business.
- Assess personal readiness
- Develop future vision
- Consider desired timeline and financial outcomes
H – Health Check
Assessing the Health of the Business: Understand current state of business opportunities and readiness risks.
- Evaluate business financial health, including profitability, cash flow, and debt levels
- Review operational efficiency, market position, and competitive landscape
- Perform SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)
- Minimize transferability risks of business assets and value drivers
E – Enhance Value
Enhancing Business Value: Focus on drivers to make the business more attractive to potential buyers.
- Identify areas for improvement to increase business value before a sale or transition
- Implement strategies to boost profitability, such as optimizing operations, expanding markets, or introducing new products/services
- Strengthen management teams and operational processes to make the business more attractive to potential buyers
- Improve customer satisfaction and loyalty to ensure stable revenue streams
R – Readiness
Personal and Business Readiness: Preparing for the transition and aligning efforts.
- Ensure all financial records are accurate, up-to-date, and organized.
- Develop detailed business documentation, including process manuals, contracts, and intellectual property records
- Train and prepare key employees for the transition to ensure continuity
- Address any potential issues that could arise during due diligence
P – Planning
Detailed Exit Planning: Work with advisors and professionals to develop a detailed exit plan.
- Consider the tax implications of the sale or transfer of the business
- Establish a timeline and key milestones for the transition process
- Identify potential buyers or successors (family members, employees, external buyers)
- Plan for contingencies and alternative strategies if initial plans don’t materialize
- Develop a communication plan for informing employees, customers, and other stakeholders about the transition
A – Action and Accountability
Execute Your Strategic Transition Plan: Stay accountable to the process to achieve your vision.
- Consider family or management succession
- Engage with potential buyers or successors to reverse engineer your exit
- Prepare for due diligence and proactively address issues that arise
- Ensure a smooth handover to the new owner, providing support and guidance as needed during the transition period
You Can’t Do Exit Planning When You’re Exiting
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